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Squawk on the Street

News/Business. Melissa Lee, Carl Quintanilla, David Faber. Opening bell market action. New.

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03:00:00

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San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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480

TOPIC FREQUENCY

Apple 27, Us 27, China 19, San Francisco 19, America 17, David Einhorn 14, Goldman Sachs 9, Goldman 6, Oppenheimer 6, Eva Longoria 6, U.s. 5, Eric 5, Qualcomm 5, Tim Cook 5, Steve 5, Melissa 5, Scott 4, S&p 4, Opec 4, Europe 4,
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  CNBC    Squawk on the Street    News/Business. Melissa Lee, Carl Quintanilla,  
   David Faber. Opening bell market action. New.  

    February 12, 2013
    9:00 - 12:00pm EST  

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welcome back. our guest host told us earlier, there's a list of stocks that will double -- you know, stocks that go up, and then time. everybody's going to double eventually, i would imagine, right? when are these going to double? >> if you go back to the nifty fifty of 1973, they were two times erjs. 1999 it didn't double. the economies will grow on a global basis, 3% plus inflation. >> how many have you got? >> i picked ten in baron's, those are available if anybody wants to go on the roundtable. two that are new that weren't there, one is a company that just announced last night the results, gencorp, they bought rocket dyne, and they're closing in on that. and that business, the basic manufacturing business which has
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short-term hiccups will earn 3 cents or 4 cents in the next few years. significant acreage in an area called sacramento, and real estate is booming. second one is a simple one, that's called legg mason which i announced yesterday. legg mason, 164 million shares, down to 128. every day they announce two-thirds of the cash flow is going to buy back stock. great cash generator and they're solving a lot of their issues. >> thank you. what are you bushing baron's? >> you get online -- >> happy valentine's day, dr. love. "squawk on the street" begins right now. i'm melissa lee, with carl
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quint a nil quintanilla and david faber. jim cramer has the week off. take a look at the picture in europe, the focus on the g-20 meeting and g-7 statements, saying they stand by market determined exchange rates. we saw a bit higher to the euro, above 134 this morning. japan's nikkei surging nearly 2%. the markets in china and hong kong are closed for a second straight day in observance of the chinese lunar new year. apple, in just about 1 hour 15 minutes, ceo tim cook takes the stage at the goldman tech conference. he will unveil a dividend increase or buyback. will he reveal anything about the product pipeline. we're on the ground in san fran. the president set to deliver the state of the union address tonight. will he strike a conciliatory tone or push for more tax hikes.
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and why will tim cook be sitting next to the first lady. europe, once again, the laggard with a decline in both volumes and sales. what a quarter for michael kors. blew out earnings, posted a whopping 41% comp in north america. we begin, of course, with apple. ceo tim cook set to speak at the goldman sachs conference in san francisco. this comes amid concerns about apple losing smartphone market share, a legal challenge in a stock that has fallen more than 30% from its september highs. it is the stock declines that i think puts into focus why apple should do something with the cash fort. nobody was saying about the cash except it was a nice footnote and that the stockpile was growing, but now there's more pressure on the company. >> that started with david einhorn a week ago. the court case, that may be important. it doesn't appear einhorn is getting that many high-profile
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investors on his side. others seem to be lining up on the side of apple, if you want to take sides here. but apple is expected to at least give some sense, maybe not today, but in the not too distant future as to what it will do beyond the 98 to $110 billion that it said it needs. it was sometime back when, towards the end of the year, where they indicated that cash between $98 billion and $110 billion on march 10th was the cash balance they had, beyond that was excess. we can expect $37 billion plus from what they take from here. we'll see if they do. they're taking the challenge seriously from einhorn. i know that. we'll see if there's a response. >> stock's up 10% from the lows. interesting that all these narratives are converging today. there's the einhorn news, there's this watch-like device. there are leaked photos, supposedly, today of the iphone
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5 s. cash is going to be one of the top questions on investors' minds. jon fortt is at the palace hotel in san francisco this morning. jon, good morning to you. >> good morning, carl. yeah, so interesting, a year ago, apple was continuing the steepest run-up that the stock had seen in about five years. it continued after tim cook spoke at the goldman conference. this time apple's coming off the worst month, the worst january that they had seen in about five years. so the conversation going to be little bit different, as you mentioned. probably having to do with what they're going to do with their cash. last year, they talked about china, and labor. because people were concerned that stories from "the new york times" and others could derail apple's momentum. now there are different concerns. people concerned about margins on the iphone and ipad, lower than some people had hoped. competition, especially from samsung. just about where the company goes from here. particularly in emerging
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markets. because that's where a lot of the opportunity is. emerging markets particularly china and brazil, tim cook talked about last year being the markets apple was looking at, particularly china. apple's not doing a lot in brazil in terms of growth. it will be interesting to see what he says about china this time. last year he was talking about the size of the market opportunity. the number of people who weren't yet buying iphones. now they're thinking the demographic might be saturated when it comes to the apple products and maybe not as much opportunity as cook was citing last year. now, apple's not the only company presenting here. i'll mention a few of the other big names coming up after cook. they include ebay, broadcom, qualcomm and sandisk. quite a bit of news expected to be coming out of here, guys. >> jon, it's interesting, because the goldman sachs analyst is one we don't often hear from either, on tv at least. what is your anticipation in
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terms of how friendly this line of questioning will be and whether or not we'll get a real push on tim cook on the stock's decline on cash allocation strategy as well as new products? >> well, tim cook is a hard man to push. and you don't often see people try to get that combative with him. he sort of has a zen type of approach. even the combative questions. so i don't expect things to get too contentious. even if they do, tim cook is likely to sit back and say, well, here's how we think about this. he's probably not going to be intimidated into giving away apple's road map, for instance. i think you'll hear him talk about how apple thinks about the technology on the back end to try to get an advantage over competitors innovation-wise. he reasonable will be forthcoming how apple thinks about culture and competition. >> comes on a day where jpmorgan writes a big piece on the
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smartphone industry. they cut qualcomm to neutral, because they say we're getting closer to the slowing smartphone adoption that we expect in 2014. they see it peaking in the next 12 months. >> yeah. those are interesting stats that run somewhat counter to qualcomm's own presentation before analysts just a couple of months ago, i was in san diego for that. i think the real challenge for qualcomm might be competitors like media tech coming in at the low end, trying to sort of come mod tiz android phones. the question is, who's going to get the biggest piece of that pie. >> we'll see a lot of you today, jon. thanks a lot. >> all right. meantime, breaking news on netflix. we'll go to julia boorstin with the details. >> melissa, netflix is partnering with dreamworks animation to create the original series for kids.
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it's based on a movie called turbo opening in july, and it will debut in december in the u.s. and 40 countries around the world. in addition to this deal for the new original series, dreamworks animations movies starting with those that are coming out this year, will be available, made available to u.s. netflix subscribers. this is a very big deal for netflix as it doubles down on the content in kids' content. paying for premium shows with a big name creator. this is also a win for dreamworks animation, generates an additional revenue stream, should help them balance out their sort of bumpy earnings results. we don't know the financial terms of this deal, but it can't be cheap for netflix. it could cost dreamworks animation hundreds of millions of dollars to create their films. later this morning, melissa, we'll be talking to netflix's
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top officer, and we'll also bring you everything on cnbc.com. meantime, the president's going to give his annual state of the union address tonight, marking his second opportunity in less than a month to set his agenda for the next term. >> how can we be a magnet here in the united states for jobs and manufacturing, how can we make sure that our work force has the skills that we need in order to compete, how can we make sure people can earn a living when they work hard, investing in infrastructure, investing in energy, all of those are ways to make our economy stronger. that will be the central focus of the president's remarks this evening. >> texas republican congressman randy newbauer joins us on capitol hill. good morning. >> good morning, how are you, carl? >> good. a lot of discussion today whether this will be an echo of some called the cockiness, the confrontation of the inaugural. is that what you're looking for today? >> i think so.
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i think what the president laid out in his inaugural address is more taxes, more spending and more government. i feel like we're just going to get the details of that tonight. >> there's been a lot of discussion about how you go about with a big agenda. some say it's his last chance to go big. when you still have so many economic anxieties at work. do you think tonight's speech will be about jobs and middle class, or will it bleed into guns and immigration? >> i think it will be a little of both. i think what the president owes the american people is an explanation of why he wants to continue down a road where it's not working, we still have high unemployment, one of the worst recoveries we've had ever. this prescription that he has prescribed for our economy, more borrowing, more spending, hasn't really brought about the jobs he said we were going to have. republicans, on the other hand, are going to talk tonight about how we're going to get america back to work, getting government out of the way, and facilitating the american people to get good
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jobs, and to get this economy back on some kind of a recovery track. >> that's going to involve marco rubio, giving the response later on in the evening. to what degree is rubio going to sort of crystallize or illustrate what some are calling a reinvention of the gop's image, at least among middle collapse americans? >> i don't think it's a reinvention, i think republicans have always been about empowering people and not necessarily entitling people. in my office in washington, i have a little red wagon that says are you pulling or are you riding. i think what we want is to make sure everybody in america has the tumt to pull their wagon and have the successes and liberties and freedoms available in this country. i think we'll lay that out tonight with senator rubio's remarks. >> when it comes to specific things regarding the market, there are some reports today, congressman, that he is not going to announce new regulations on carbon emissions for existing power plants.
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how much will you be on the lookout for that, things that affect energy, coal, nuclear, obviously things that have an effect on the rails as well? >> we'll be looking extremely close at that. when you look at the sector, particularly around the country right now, the energy sector is really creating a lot of jobs in this country. particularly in the hydrocarbon area. despite this administration's continued efforts to try to thwart that. we want to make sure that the president allows america to have an all of the above energy strategy in this country, and that we don't have the government picking winners and losers in the energy sector. let the sector choose the jobs, particularly in the oil and gas industry. >> he could say the keystone pipeline, i think we're going to do it. a chance of that? >> there's a good chance, that we should do that. if we don't invest in that infrastructure, it doesn't do any good to find all this oil and gas around the country if we're not able to get it to the markets, where we can use those
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energy resources. >> if he comes across tonight, congressman, not as strident as some say, if it's sort of in the middle, if he says when it comes to gun control and immigration, the right and our administration, there's a meeting of the minds. is that going to be a fair representation of where we're at? >> i don't know. you know, talk is cheap. i think what we need to see is the president jump out there and really show us that he wants to come together and work on some of these solutions. we've heard him say this in the past. but when it came down to it, it was really basically what the president said was, it's either my way or the highway. he won't be able to get much of his agenda done if that's the tone of his speech tonight. >> congressman, appreciate your time. it's going to be an interesting evening. thanks so much. >> thank you. >> watch the coverage of the president's address tonight 9:00 p.m. eastern time until 11:00. we'll take the response as well. sir larry will join us, john harwood. it should be an interesting evening. coca-cola reporting profits of 45 cents a share, slightly
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above street forecasts. revenues were short of estimates as was global case volume. earlier on "squawk box," the ceo said he's pleased with his company's results. >> in a world where you have this kind of volatility, to be able to deliver results of growth in earnings, growth in revenue, at 6%, growth in cash, and growth in market share, record market share, and record volumes, i think we're pleased. >> and take a look at the shares of trading in the pre-market, down by just about .4 of 1%. interesting because they actually added two more brands that surpassed the $1 billion mark. surprisingly these brands were in japan, not here in the united states. they're a green tea product as well as a water product in japan. which really tells a story of coke's global growth strategy, that the next billion-dollar brands will be in the overseas
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markets that are fertile grounds. >> india slowed, china down, some of the growth engines weren't there this quarter. although some of the long-term targets remain intact. pepsi is ringing the bell. they'll try to steal a little thunder today. >> who else is ringing a bell? an actress? >> named? >> eva. >> eva longoria is here, that's right. when we come back, there seems to be no stopping michael kos. posting a blowout quarter raising guidance for the full year. how long should you ride that rally. eva longoria, why she's ringing the bell here at the big board. futures this morning, moderate action. the last couple sessions have been the lightest volume of the year. both friday and monday. "squawk on the street" is back in a minute. aw this is tragic man, investors just like you
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michael kors blowing past wall street estimates. 70% increase in total revenue on the search. the stock is up nearly, what, 12% in pre-market trading. what gain here. an analyst has a rating on the stock at a $65 price target. great to speak with you. >> good morning. >> it's hard to find anything
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bad in this earnings report, or anything concerning. but it if there's anything about the kors story that keeps you up at night, what would it be? >> i think the one thing we're concerned about is the growth margin. it did come a little bit below our estimates. but that is something that does keep us awake at night. i think the inventory in storage, as the brand gets more widespread, and more customer acceptance, you know, we're concerned about the level of markdowns going forward. it isn't a problem currently. >> right. and talk to me about valuation here. how do you feel about a 36 times forward pe, approximately? the stock is set to open at a fresh record high here. >> right. valuation, it would appear rich. but we think there's a continuing in earnings, estimates going higher following the comments in the conference call today. we would expect they would grow into that multiple a little bit. >> you see a 41% surge in
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same-store sales in america. you immediately wonder who kors is taking share from. who do you think kors is taking share from? >> well, the obvious culprit would probably be coach. but we do see competitors across the landscape as more apparel manufacturers are getting into the accessories business, including ralph lauren. we did see a lot more of a, you know, much more competitive wholesale environment this quarter. >> corinna, would you recommend buying the shares here? >> it is a little difficult to recommend starting new positions, but we most certainly would be holding on if we did own it already. >> all right. great to speak with you. thanks for your time. >> thank you. >>. when we come back, what does art cashin want to hear from the
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president in tonight's state of the union? he'll tell us here at post 9. one more look at futures on this fat tuesday. we'll try to let the good times roll when "squawk on the street" comes right back. [ kitt ] you know what's impressive? a talking car. but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ how do traders using technical analysis streamline their process? at fidelity, we do it by merging two tools into one.
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so, beginning today, my son brock and his whole team will be our new senior social media strategists. any questions? since we make radiator valves wouldn't it be better if we just let fedex help us to expand to new markets? hmm gotta admit that's better than a few "likes." i don't have the door code. who's that? he won a contest online to be ceo for the day. how am i supposed to run a business here without an office?! [ male announcer ] fast, reliable deliveries worldwide. fedex. this is tuesday morning. we open the segment with duran
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duran union of the snake art. you mentioned the dangers of the year of the snake yesterday. today your notes about the danger of a giant asteroid getting very close to the earth. >> well, we have to stay alert to everything, you know. you can't just rely on the super bowl indicator, right? >> what is the significance of this asteroid? >> the significance of the asteroid? >> yes. >> it is an idea that we've always got to be alert. i wouldn't expect it would hit the earth, which would be very damaging. nasa and others assure us that it will not. but there is some risk that it could pop into one or more satellites. and that could change everything from gps to communications. so you have to be ready for surprises. >> is this why volume is so light, even though -- >> people are in their bunkers? >> everybody's hunkering down in front of the asteroid. no, i think the volume is light,
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because we're right at an uptrend line. and we're either consolidating for a break-through, which would be very important, or we're stalling and pulling back. if you go back into may of 2011, we've hit this uptrend line several times. and each time we've had a pullback that was not insignificant. >> that's funny, the journal points out, we hit 14 k on february 1st, and since then, we've gone up 141 times. you've made the point before, these psychological levels are like the hard door, and the battering ram has to hit them a few times, more than once. >> it is. people have to feel more relaxed about the fact that we've gotten here, we're moving through. you know, for old-time traders, we're not only at 14,000, but we're reasonably close to the all-time record high. and history tells us, and
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cocktail napkin charting tells us, that when you hit all-time levels, people are saying, i missed getting in last time, i'm not going to miss getting out this time. >> eva longoria has made her way to the balcony here of the exchange. a lot for us to talk about. a lot more "squawk on the street" is back in a moment. tecd
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...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ the opening bell on this tuesday. everybody awaits eva longoria to ring the bell, and then come down here to talk to us. three new flavors of potato chips on which the public can vote. that's sort of a social media usage. >> do you want to tell them what the flavors are? >> cheesy garlic bread, and saracha -- >> i don't know what your vote is. >> i told you.
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a lot to watch in today's session. the state of the unit address tonight. a lot going on over in europe. take a look at the euro, a swift move overnight. above 134. essentially saying they stand by market determinants when it comes to exchange rates. that pulls it in under the euro this morning. about 45 minutes away from tim cook speaking at the goldman sachs conference. we'll be watching shares of apple shares closely today. here we go. [ bell ringing ] >> three new flavors of lay's potato chips. eva longoria will join us here at post 9 in a few minutes. and celebrating the anniversary of the my little pony brand. happy birthday, my little pony. >> we had a moment yesterday
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off-camera where i cited all the characters from my little pony. that's what fathers of 3-year-olds, that's what we do. we talked about coke. we talked about kors. mcgraw-hill is out with, david, with what was broadly called a confusing complex quarter. at one point, i read there were five different figures for eps. >> the numbers of comparisons are difficult to make as well because they divest in the education business. it's largely a lot of these s&p, as our viewers well know, what happened to the stock when the department of justice decided to bring charges against mcgraw-hill last week. and a number of other businesses, capital iq, things of that nature. tough comparisons. this stock has been moving, of course, as much on the litigation, and the perception of risk that that has now brought to these shares. we'll see if we get any comments beyond what we've already heard. not just from management, but
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importantly from its lawyers as well. regarding that. but we'll see, and bring you, certainly, anything we hear from the conference call if there's anything worth mentioning. >> mcgraw-hill and moody's, a nice jump. sort of building on that. when you're talking about a stock with this sort of outside external risk that you're trying to price in, you see these two-day price actions, it certainly gives you hope that there is some sort of a floor for the stock at this point. that's worth watching at this point. and a downgrade of facebook yesterday, citing the north american price for ad growth, strong in the first and second quarter, but it looks like it's going to face declines in the third quarter and more sharply in the fourth quarter. so we're seeing facebook shares down by 2.4%. again, a very unusual after the
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close issuance of this downgrade. >> want to keep a close eye on shares of massco. out with earnings, 4 cents, beats 1 cents. the things they have to say about the housing business in this country, no real signs of slowing down. the second biggest gainer in the s&p today. you've seen some of the valuation also. analysts downgrade various housing names, but masseco is not one of those. >> we saw the big gain in louisiana-pacific. plywood sector, a supplier to a lot of construction in the housing play as well. had a nice jump on earnings. valspar this morning, very weak earnings. there wasn't much clear guidance for valspar, which is a paint maker. 8% decline in today's session. that's one we're watching as well. >> interesting to note shares of dell are trading at $13.76 a
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share. that, of course, about 11 cents above the deal in which it will be acquired by michael dell and silver lake. they will pay two dividends between now and the, presumably when the deal will close. that does take it above the current price. people are buying this stock at this level, perhaps in some expectation that the opposition to the deal will result in a higher price. we'll see. this battle has yet to play out for some time. they've hired a law firm, advisers, they will be in it to fight. again, it'soing to be two earnings periods from now. we'll see how the s&p does. a lot of different things will occur over these months as we get closer to the shareholder vote. >> carnival, really quickly. the triumph is still without propulsion power. looking to be tugged, and still waiting for the tug, by the way, and will arrive in mobile,
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alabama, they say by thursday. but in the meantime, peter greenburg this morning on cbs said it has the makings of a biohazard at sea. >> there are no toilets on this ship. there's no electricity on this ship. there's no air conditioning on this ship. >> it's got to be unpleasant. >> i would imagine. >> that's putting it very, very nicely. unpleasant. kors, by the way, record high in today's session. >> short position in kors, or there has been. not quite sure what the thesis has been for those who have been short. >> run too far too fast? not a good -- >> suffering as a result today. they're up almost 12%. >> eva longoria taking an awful lot of pictures on the floor today. this volume may hit a record low, i would say that. this is in the morning session. we'll get to her in a moment. she makes her way to post 9. but in the meantime, mary thompson is watching what's moving, too. >> carl, mixed open for wall
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street today, as investors look for maybe a little bit of a rebound, up off of monday's decline. slow session, slowest of the year actually for monday. what we see is slight gains in the dow, just about eight points. nasdaq actually a little bit weaker. we're seeing a pullback in some of the semiconductor stocks. that's keeping pressure on the nasdaq in early trading. this is investors who say it's positive earnings news coming out this morning. the strength we are seeing in the euro, of course, the yen is seeing a little bit of a pop as well here today. g-7 officials saying they are concerned about the recent moves in the yen. it will be a focus in the g-20 meeting later. there you can see the yen actually benefitting from that to some extent. let's look at some of the stocks in the news. avon, excluding items, the company beat estimates by 10 cents a share. as it continues to undergo a restructuring that includes job cuts.
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we did see some strength up, sales up about 2% in latin america, which is its largest marketed stock, up as well in early trading. goodyear tire and rubber actually came in with better than expected results. but cut its forecast for 2013 because of weakness in the european markets. that's putting pressure on its shares as you can see, down over 4% today. i just want to add, mcgraw-hill, i was listening to the conference call that it held earlier this morning, and focusing again, as the company's general counsel outlined the strategy to deal with the suit brought against its s&p unit by the doj. repeating that the suit was without merit, pointing out that the doj is seeking penalties. it was about $500 million, and the company itself only earned about $15 million in revenue on rating those cdos. barclays up on the news of the restructuring. melissa, back to you. >> thank you very much, mary thompson. let's check the bonds and
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dollars. rick santelli at the cme group in chicago. rick? >> thank you, melissa lee. look at the fixed-income market, the equities trying to punch through a double top from its previous high. we see that we are still, could be the 13th day we're in a tight trading range in treasuries. two-day chart of ten-year yields would show you we're slightly above yesterday's high yield. the chart i'm really concentrating on goes back to the 25th of january. there's the range. we've been in a six-basis point closing range. the boon, very, very similar in its development over the same time period. let's switch gears and go to the foreign exchange markets. they're trying to adjust how janet yellin could try to split the notion that what the japanese are doing is currency manipulation, but what quantitative easing isn't. that's a tough one. let's look at two-day charts, because that now is the topic. and you can see, the two-day chart of the dollar/yen, certainly it did help the yen a little bit.
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but on two days, you can see we're still doing better than we were yesterday. if you look at euro/yen, similar pattern. if you look at the last chart, euro versus the dollar, it is benefiting a bit from the dialogue regarding fx. melissa lee, all yours. >> all right. thank you, rick. let's check out the latest news in energy. sharon epperson is at the nymex this morning. >> we are looking at a little bit of risk appetite coming into the marketplace and helping to support oil prices. brent crude and wti both higher. and north korea, they're talking about what they're doing there in terms of confirming the nuclear test and capability for missile capacity, and even closer. they're also talking about iran and the fact that iran has talked about converting enriched uranium into reactor fuel. now, some taking a run at its words, saying maybe this is a bit bearish. they won't be close to creating a bomb, others saying it will cut the time in the amount of time it takes them to do so.
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wti getting a bit of the lift as we see the unwinding of that premium we've seen. brent crude to wti futures, which has been so extreme. another factor helping the oil prices, opec. opec's latest monthly forecast coming out, talking about the world demand growth is going to be stronger than they anticipated, and there's going to be greater demand for opec oil. we're looking to see the opec price approaching $115 a barrel. and keep your eye on gold prices. gold prices have cut some of the losses we've seen. we're still looking at some of the key levels like the 1650 level, and watching, of course, what currency -- what happens in the currency markets. the reaction we're seeing there in the gold trade. back to you. >> sharon, thank you so much for that. fresh off ringing the opening bell on behalf of frito-lay, we're happy to have eva longoria here at post 9. not only an actress, also a television producer, political activist, director now, co-chair, president obama's election campaign.
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welcome to post 9. it's great to have you. >> thank you. >> you know how to light up a room, or a trading floor in this case. >> yeah, thank you. it was a lot of fun. this was my first time here. >> definitely the way to see it. this is the primo tour. when you get to come to the balcony. walk us through the new initiative that we have. do you have to try all of these? >> i tried more than this. i tried many, many, many flavors. i didn't try 4 million, but almost 4 million flavors were submitted to the consumers of this contest. i think the million-dollar prize attracted some people. but these are the three finalists. they're really interesting, good flavors. america gets to vote on the winner. >> can you describe what chicken and waffles tastes like? >> you don't know? have you never had chicken and waffles? >> no. >> i have, but i can't imagine it on a potato chip. >> that was a little interesting taste the first time i tasted it. but really creative. very interesting. the sarachi is nice.
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cheesy garlic bread is cheesy garlic bread. >> when i look at you, i don't think potato chips. >> oh, my god. i don't have a sweet tooth, i'm not chocolate, candy, i'm a salt. i like olives, potato chips, pretzels. chips are right up my alley. >> we should welcome you to the nbc family, by the way. >> thank you. >> the new reality show you're producing premieres march 31st. >> yes. i think it's premiering march 26th. >> that's always a good sign when they move it up. >> they moved it up. it's very exciting. about three guys who are ready for love, and we have kind of a modern take on the dating format show. drama, excitement, love, romance. it's going to be an amazing show. great takeaways for men and women, as far as advice that these matchmakers are giving. >> you're joining us on the day where the state of the union takes place. >> yes. >> we know how involved you were in the reelection campaign. what kind of report card would you give him for the first four
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years? and do you have big aspirations for him over the next four? >> oh, absolutely. i mean, i give him an "a" for the first four years. everything from equal pay for women, and ending the war, and, you know, ending "don't ask, don't tell," getting the economy back on track. i think he did a lot for america, and he has a lot more to do. i'm so happy immigration reform is now on the table. and of course, he's going to -- he's doubling down on his theory tonight about how to grow the economy from the middle class out. i think -- i expect a lot of great things, as most americans do. >> he was met with criticism for his tone during his inaugural address. i'm wondering if you think he needs to ratchet that down in the state of the union address in a slightly more conciliatory tone. >> no, i think he can never win. during the campaign he was too soft and compromising, now he's too tough. and too sharp. so i think you can never win that battle. you really have to be solution
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oriented, and that's what his pret oh rick is really about, and how he delivers that, or how you receive that is not really probably the focus of his speech. it's, let's get the solutions done. >> rachel fox ring any bells? a young actress on "desperate housewives," on our show last week. >> oh, wow. was she my child? >> no, she was older than that. >> oh, okay. all right. then no. >> she has a financial blog. >> oh, does she? >> fox on stocks. i think we have a short sound bite. let's take a listen. >> i don't necessarily trade a stock like apple quite as much, because it is so -- people are always talking about it, somebody's always speculating on it, it's being swayed by somebody's opinion or some piece of news. >> just to make the point that she played felicity huffman's daughter. >> oh, okay. >> we're all about the "desperate housewives." >> thank you for having us all on. >> i'm curious to know what it's
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like to work with ingrid of pepsi. one of the most dynamic ceos in america. >> one of the most dynamic human beings. now she is a leader in what she's done. you can see it's reflected, it trickles down within the company, not just from pepsico, but frito-lay. you see a lot of women within that hierarchy, which is very fascinating to see, that the head of this campaign is ann. you know, the marketing person. and everybody else involved, it's like you see -- i'm surrounded by women for this campaign, which is really inspiring, that she's extending that hand and pulling other women up. >> just so people know, where can they go to vote on the final flavor? >> they have to go to facebook to vote. but these are ready for purch e purchase. what happens is the bags that sell the most wins the contest. >> do you have a favorite? >> i don't.
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>> you do. you do. >> they're all three amazing finalists. which i'm very excited about. and the people who submitted these, they rang the bell with us today. the consumers that submitted these flavors, and they're humble and amazing. they've already won money. the second and third place gets $50,000 apiece. but the first place gets $1 million. >> you'll leave those here? >> yes. >> we'll be fighting over them in the break, i'm sure. >> thank you so much for taking some time. >> thank you. it is the speech investors and gadget fans are waiting for. apple ceo tim cook set to speak in about a half an hour from now. what is the need for apple stock. revolutionizing an industry can be a tough act to follow,
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only 25 minutes before tim cook addresses the goldman sachs technology conference. we'll break down what we can expect to hear from cook and what does it mean for apple stock today. great to see you.
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>> hello. >> what are you expecting to hear from cook today? >> yes. he's going to speak at the conference and we don't think he'll get into too much details over there. at this point, where the stock is, we think he'll address two things. strategy and products. they said they're actively looking at the cash balance. we expect them to increase dividends and have more buybacks. we think he's not going to get into details, but they're going to indicate their willingness to do that. on new products, they'll definitely talk about new products before the actual launch. but i think he's going to talk about the confidence in the new product pipeline. >> do you think that tim cook's playbook will change a little bit, given the pressure that he might be feeling from shareholders, like a david
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einhorn? and the focus that apple's been under, and the scrutiny apple's been under in his application policy? >> they're under a lot of pressure, we do think they'll be addressing some of those concerns. but i don't think they'll be going into specifics over here. if we hook look at last year, t announced after their shareholder meeting, and we expect them to do a similar announcement by the middle of march, or end of march. >> there has been a little bit of run in the stock of -- in terms of leading up to this address, where it's so widely anticipated tim cook will say something. but you're basically saying investors will be disappointed at the end of the day? >> the thing is, they have an eye on what's going to happen between him and what einhorn is pushing. over the next quarter or so, we should see an announcement.
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but it's not apple's, kind of dna, to make announcements at these conferences. >> thanks for joining us. >> when we come back, norwegian cruiseline ceo, how will his company deal from the fallout of the mishap of rival carnival. keep it right here. [ male announcer ] you are a business pro. omnipotent of opportunity. you know how to mix business... with business. and you...rent from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this.
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simon hobbs has a look at what's coming up at 10:00. >> this will be the interesting points in television when we really don't know what's going to happen when tim cook speaks about apple. anything can happen in the next hour. you'll hear it first here on cnbc. the state of the union address obviously tonight. open table ceo will be on the show. david faber, am i right in thinking that eva longoria put her arm around you in the first hour of "squawk on the street"? >> i wouldn't go that far. >> she did touch you, though. >> well, it was a very nice touch. >> it was nice.
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>> just saying. my wife wasn't that happy about it. no -- >> she was thrilled for you. >> we're not leaving later, at least i don't think so. let's have a faber report here, or talk a bit about secondaries that occurred yesterday. priced at the close and/or this morning. worth noting, and worth bringing to your attention this morning. when you take a look at it, where you are year-to-date versus last year, it looks significant. cosmo, $30 million, american capital mortgage, team health. there was quite an outpouring of secondaries from many companies. why? well, not too hard to figure out, is it, with the s&p up, what are we up, melissa, 6% this year so far? 6%, 7%? you can imagine companies are looking to use this as an opportunity to sell and/or for existing shareholders, to put it in some perspective, it is the biggest year-to-date versus all
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these other years. i wanted to focus a bit on hba. it was $36, $1.8 billion worth of stock. but interestingly, you've got the private equity firms selling below 50%. that will mean that there may be changes in the composition of the company's board of directors. what happens when you have private ownership in private equity, they're not quite as interested in you doing other thingses, as they are returning capital to them. and so now that that has fallen below 50%, perhaps hca, something to keep in mind at least. do they consider other forays as far as consolidating in the hospital industry. >> all right. when we come back this morning, in just about 15 minutes, apple ceo tim cook due to address the goldman sachs technology
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conference. will his message be just what the doctor ordered for that stock which is down just about a percent today. [ engine turns ov] [ male announcer ] we created the luxury crossover and kept turning the page, writing the next chapter for the rx and lexus. this is the pursuit of perfection. writing the next chapter for the rx and lexus. all stations come over to mithis is for real this time. step seven point two one two. verify and lock. command is locked. five seconds. three, two, one. standing by for capture. the most innovative software on the planet... dragon is captured. is connecting today's leading companies to places beyond it. siemens. answers. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand
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5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ we all work remotely so this is a big deal, our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard.
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hey do you wanna get a drink later? [ male announcer ] hold packages at any fedex office location. breaking news this morning. we're minutes away from apple's
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ceo tim cook taking the stage at the goldman sachs technology and energy conference in san francisco. it's been a little over a year with cook at the helm of the tech titan. it is up from the 52-week low, 435, closer to 480 right now. >> let's bring in skcott wapner from outside the conference in san francisco. a lot of pressure on the company today, scott. >> reporter: absolutely, melissa. in about 15 minutes, in this room to my right, tim cook is going to take the stage. what is going to be a fireside chat style conversation with the room. he's going to be interviewed, or asked questions by the goldman analyst that covers apple. tim cook's not going to be able to control the conversation completely. likely to get a lot of questions about what apple's going to do with its cash, and of course he's going to be asked about what products they may have in the pipeline. where that hole story seems to be leading. happens at a very interesting
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time. we know what's been going on with apple shares. but it also comes at a time when there's been some very public calls for tim cook to do something with all that cash that apple is sitting on, a third of its market cap, 130-plus billion dollars. we all know about dave einhorn last week taking on apple to do something with its cash, saying it has a depression-era mentality about that. certainly all eyes will be on that. there is precedent, by the way, for tim cook to address the issue of cash. it was just one year ago at this very conference when mr. cook was asked about it, and he said the following, that they would be discussing a dividend in greater detail. those were tim cook's words. of course, only a month later, maybe not even quite one month, apple announced that dividend. all eyes will be in this room for a chat. it will probably last around an hour or so. the conversation will likely lead from not only talk about what they'll do with all the money, but what they're going to do with the next wave of products. it was just a few days ago we
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were talking about the potential for a possible wristwatch-like device. they'll likely be asked about the iphone mini stories floating around. and television as well. which cook, by the way, two years ago at this conference in 2010, said apple had no plans to be in the television business. wonder how all that may have changed over the last couple of years as apple has looked at its product mix and trying to figure out how to take the story to the next level. apple coming off the worst january in some five years, down today, as you guys mentioned, ahead of this big speech. so in about 15 minutes, that keynote is going to begin, and certainly all eyes will be on this room just to my right, guys. >> all right. thanks so much, scott. a lot of people saying news doesn't break at this types of conferences. we know that's not always true. 360 apple coverage continues in just a moment. cook's comments live as he begins speaking.
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immediate reaction from several apple shareholders. and the ceo of pebble, creating a rival smart watch, similar to the one apple is rumored to be making. coke beat by a penny, but revenues were short of expectations. tim cook will be heading to washington for the state of the union after he speaks today in san francisco. the economy, jobs and sequester expected to be major points in the president's speech tonight for a republican outlook on tonight's speech, we're joined by the republican representative, reince priebus. what is the president going to say? >> we're facing massive defense cuts, as you know. we just really want to get serious about spending.
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and i understand the president's going to play this rich versus poor game again, with revenues, and these loopholes that aren't going to go anywhere, because his own members don't support raising taxes on businesses that are involved in oil and gas. like senator landrieu in louisiana, they don't support him. i think we need to get serious about spending. pass a budget. i think that the democrats should work on trying to pass a budget. they haven't done it in 3 1/2 years. it's not serious. it's another speech. he's pretty good at giving speeches. we know he's a good campaigner. but i think the health of our country is at stake in a serious way. i think americans agree with that. but he needs to do his job as president, and the democrats have to get to work. >> speaking of campaigning, you mentioned the president's actually going to embark on a tour of three cities, in i think three days right after the state of the union. is that -- do you take issue
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with that? the president going across the country to try to get his message across? do you think he should stay in d.c. and get to work with congress? >> it's what he does, right? he's an alpha dog campaigner. that's what this president does. it's what he's done for four years. you know, it's like deja vu. it's what we said two years ago, when it comes to campaigning, when it comes to getting on a bus, when it comes to using air force one, he's pretty good at it. but when it comes to actually following his debt reduction committee's recommendation, when it comes to passing a budget, he doesn't do it. look what's going to happen over the next two months. over the next two months, the republicans are going to, under paul ryan's leadership, they're going to pass a budget. they're going to present the budget. it's going to be serious when it comes to debt. it's going to be serious when it comes to spending. we just passed two measures in december, so that we could avoid massive defense cut spending when we don't need them. we're passing things. here's the problem, melissa.
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we only control one-half of the house. so at some point, the president's going to have to come in, and he's going to have to lead this country through very difficult decisions. but as of now, he's not doing it. and so we're a bit of a broken record, but we're going to continue to lead and show america that we're willing to make tough decisions on america's most difficult challenges. that's what we need to do as a party. >> we've got to leave it there. thanks for joining us. appreciate it. reince priebus of the rnc. former pennsylvania governor ed rendell, good morning to you. >> good morning, guys. >> we've heard from the likes of senator john manchin, for instance, who says he is hoping for a speech that is not too confrontational. is that what we're going to get? >> well, i think you're going to get a speech that lays out some of the things that the president basically believes in. and he's going to confront on things like guns and
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immigration, because they've got to get done, and the american people are 100% with him. it's my hope that i would join senator maenchin in terms of dealing with the debt problem and dealing with the budget and sequester, that the president does reach out to the other side. the weakness in what reince just said, it's on the cpi. you remember the republicans ran from chained cpi. mcconnell took it off the table. the republicans talk about spending cuts, talking about the things we need to get this under control, and get debt down to a reasonable percentage of gdp, but they're unwilling themselves to sign on to the most difficult things, the things that administer pain. so we'll see, you know, whether the president's going to lead on this issue. i hope he will. but the president's also going to talk about something that's very important. the need as we're reducing the debt in the long term, the need for short-term and long-term
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investments that are going to change the economic picture for this country. i think you're going to hear a lot about that, infrastructure, energy, education, research and development. the things that really key american exceptionalism. even as we deal with the debt. >> we've seen the president, governor, create jobs councils, held summits with ceoings from the nation's biggest companies. but that's not in the context of a big audience like the one he'll have tonight. is there any likelihood at all that he throws an arm around business in a way we haven't seen yet? >> i think there's a chance. i do. i think the president understands his number one obligation right now, is to get the economy moving, and create jobs. in fairness to the president, he gave a very good jobs speech in august of 2011. in which he outlined specific ideas that the republicans had backed, each and every one of
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them had backed them in the past. they rejected each and every one of them, as a whole and individually. because they didn't want the president to have success at that time. well, the time has come now that we should start investing in things that create jobs, like repairing our infrastructure. clearly something that everybody should agree about. our infrastructure is a mess. i mean, guys, can you think of just -- just think for a moment, if we decided we were going to bury every electrical line in this country, think of the jobs that would create and think of the harm that it would avoid in the future. that's something that would key into american exceptionalism. that's something big, that's something bold. i think that's what we need. i hope the president will address that tonight. >> it would certainly help the power outages in connecticut and long island. >> not just connecticut and long island. >> but it's one that would be resolved if we were to go that path. >> all over the country. >> not sure we have the money for it, but that's another
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story. governor, he has said alternatively that climate change is a top priority, and not a top priority. is tonight going to settle that score? is this going to happen or no? >> he's going to talk about climate change. and lord knows we need to do something about climate change. but i think if the president leads, he can wrap the need for progress on climate change into an american energy independence bill. a bill that has in it things that promote virtually every segment of our energy production. many of which are far superior than the way we're getting energy now. >> governor, thanks so much for your time. see you tonight, i'm sure. >> thank you, guys. it will be interesting. >> ed rendell from philadelphia. tim cook making his way onstage. stay tuned.
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welcome back to "squawk on the street." we are still awaiting tim cook's fireside chat with the analysts at goldman sachs technology conference in san francisco. apple shares trading slightly lower ahead of this address. certainly a lot of anticipation over what tim cook might say during this chat. although apple's management is very well known for not divulging much. particularly when it comes to products ahead of a product launch, or capital allocation strategies. when apple announced its dividend last year, it was a matter of weeks after the shareholder meeting. the shareholder meeting this
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year taking place at the end of the month. a lot of analysts seem to be discounteding what might or might not be said at this conference. >> it does give tim cook a chance to change the tenor of the conversation. look at the external comment, those that would like an increased dividend, oftentimes that's a short-term consideration. tim cook can lay out the long-term aspirations of what is happening with the business, and why potentially they might need that cash down the line. it could change the narrative. >> it could, or it could just be boilerplate things that we've heard before. >> i don't expect much from an analyst, when an analyst asks questions, they go through a list of questions they don't particularly listen to the answers and follow up. they won't in any way contest him. he's obviously a client of the firm. >> so it is really up to tim cook as to what he wants to share or not share. >> that said, it's probably
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better to have an analyst asking questions than some random tech conference -- the issues on the table are largely balance sheet issues, margin issues. let's bring scott wapner back in from san francisco. scott, how close are we? >> reporter: pretty close. in fact, the festivities have started in the room just off to my right here. in a matter of moments, we're expecting goldman ceo lloyd bla blankfein to introduce tim cook. the mere fact it is at least a fireside chat conversation that will last about an hour, they could have some q&a at the end. the appearance, if you will, he won't announce any new products on this stage, we know that. in the past he certainly has addressed the cash issue. and that's what everybody wants to know about. no citings of david einhorn, by
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the way. he is calling for the special preferred stock, and he has made his fight against apple public in the last week or so. that's the context as we wait for tim cook to formally take the stage, which as you guys know, could happen in a matter of moments. >> right. and of course, again, getting back to management, mum about a lot of things. we were talking to brian marshall last night, and he said he met with the cfo on friday, and in talking to him, he talked to him for about an hour or so, he said it was like extracting water from a stone. that was a quote from his note. it's that difficult to get in any sort of information. >> is he the guy that also wrote the notes about how the smart money was getting back into apple. >> exactly. >> so there is a move back. >> he believes the transition to a value stock has already happened. >> so you've had the discounts. >> we've had the discount here. but the next step would have to be a capital allocation strategy, which would allow the value of shareholders to stay in there. that usually is for dividend
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paying, let's say mutual funds, a record of increasing its dividend. apple, while it initiated the dividend, has not increased its dividend. the criteria for a lot of these dividend paying funds is investing in companies with a track record of increasing a dividend, not just having a dividend. >> i think we can say with some confidence they are not going to adopt mr. einhorn's proposal to issue a perpetual dividend stock, or perpetual share. we'll see what they choose to do. my sense would be they will come up with something, although not necessarily today. but we will hear something. >> one clue this is not your ordinary run of the mill tech conference is that they've sent lloyd blankfein out to do the special remarks. no cook yet, but lloyd blankfein, the head of goldman sachs, is introducing tim cook. we'll bring you the latest live from san francisco when we're back in a moment.
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now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. don't let it be said we don't hype these things enough. tim cook, the head of apple, is
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on the stage in san francisco. lloyd blankfein finishing his introductory remarks. hey, scott. >> hey, carl. thanks so much. still bearded lloyd blankfein, by the way, introducing tim cook moments ago. the conversation with bill showed he's the goldman analyst up on the stage with tim cook, as we mentioned throughout the morning, it's a fireside chat, where he'll be asked a number of questions which will probably last about an hour. you know he'll get questions regarding what apple is going to do with its 130-plus billion dollars in cash. you have to wonder whether he'll be asked directly, and i assume he would be asked directly about what david einhorn wants apple to do with the cash related to the stock, that they're sitting on, which is nothing short, as i said, of enormous, one-third of the market cap is sitting in cash. will he say anything about what's coming down the pipeline in terms of new products? maybe not.
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but he could drop some hints. he did mention television a few years ago here. so certainly we'll be keyed in to find out, or listen to anything that he says about any products coming down the pipeline. risk wat wristwatch, iphone, we'll be keyed in there. >> first headlines are coming in. having read the safe harbor statement, which must have been scintillating to watch, cook is saying apple does not have what he called a depression-era mentality when it comes to cash. something certainly that was part of einhorn's grandma -- >> direct address, yeah. directly addressing the comments. looks like my grandmother who grew up during the depression would hoard cash. so this is a direct rebuttal to what david einhorn was alleging when it comes to the capital in cash. >> what's interesting, melissa, by virtue of what david einhorn did last week, he has forced this front and center to be addressed at a forum like today.
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normally would tim cook be asked about the cash? yes, he would. but would he be asked with that in the back drop where he knows he must address what david einhorn has said. it was already unique enough that on the very day that david einhorn said what he did, that apple responded. you guys know they never do that. the mere fact that they addressed einhorn on that day was significant. >> it is surely broader than that. we're looking at a chart where it's lost a quarter of its market capitalization. it's not just einhorn, scott, there are many, many investors who are very, very concerned, many of whom, of course, as we reported doubled down. >> i think the point that scott's making is -- >> it takes an einhorn to sort of force that conversation to be dealt with immediately. >> do you think it is just about the return of cash to shareholders, or do you think it is something broader about that, about growth? i mean, maybe you'll get news on a china deal. where are we with china mobile, china telecom? >> there could be a conversation
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on that. he's going to be asked about margins, which everybody is concerned about. especially amid talk about a potential mini iphone and what that would mean towards margins, which are already compressed a bit. how they're not going to be able to grow at the same pace that they have in the past. that's one of the reasons why the stock has come down from $705 to where it currently sits now. although it has had a nice rebound of late. >> scott, we'll get back to you in a few moments. the headlines now from inside that conference, apple also saying it's investing in research and development as well as new products. apple directly addressing david einhorn's comment that it had a depression-era mentality when it comes to cash. let's bring in eric jackson, he joins us now on the news line. eric, i'm just wondering if you believe that something will be done with this cash, whether it be announced at this particular conference, or weeks after the
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shareholder meeting, and whether david einhorn played a pivotal role, in your view, of pushing this into the spotlight? >> yes, there's no question he did. and i do think we're going to get some answers on increased either stock buyback, or, you know, some form of the cash coming back to shareholders. but i don't think it will happen until the end of the month. basically, what's pushed this forward with einhorn is that apple has a shareholder meeting coming up at the end of the month. so shareholders have to vote on this particular measure around pressed stock. so he basically took that opportunity to kind of put this front and center. so i think basically between now and then, there's going to be a lot of back channel discussions, and i would expect some sort of shareholder friendly announcement before the end of the month. >> how are you voting your proks ji? i ask that, because there are already notable large shareholders, new jersey, who
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are cisiding, if you will, with apple. >> i'm not one of these david einhorn fan boys who automatically agrees with everything he says. but i do -- i'm still setting a press stock issue. but i think there's no question that the moment he went public in his -- with his pr campaign last thursday, that was -- to my eyes, that was a failure of apple cfo, peter oppenheimer. that should never have happened. and it's confusing, listening to einhorn tell the chain of events, you know, how it came to that. because whether you agree with the measure or not, that einhorn's putting forward, basically it appears oppenheimer blew him off in september. and then einhorn continued to try to have conversations, put it forward to tim cook. tim cook didn't know anything about this issue. so oppenheimer kind of kept him in the dark on it. but then the moment that einhorn
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takes it public, the same day, apple comes back and says, oh, no, we're going to study this issue. it's kind of schizophrenic on apple's part. if they're going to stick their head in the sand and ignore einhorn, then you sort of play that to the hilt. they came across as not knowing what's going on, and i blame oppenheimer. >> one thing we can say about the conference is they're not pulling any punches, not beating around the bush in terms of, the first question addressed these very issues, cook called einhorn's proposal creative just now. said the issue is more about shareholder rights, not so much about whether or not the company will in fact return cash. given what's happened in the first few minutes, you've got to be optimistic that we're going to get a little more clarity than some might have thought, given it is an investment bank conference. >> well, yeah. whether you agree with einhorn or you agree with apple, i mean, the shareholder's winning out of this whole battle. full credit to david einhorn for putting this forward.
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and getting this on the table and getting it addressed. because there's no question that the shareholder is going to come out ahead. >> just to clarify, when you suggested the fact that einhorn had gone public on what he wanted to do, that might be a negative. you're not suggesting that the cfo is resistant in general to the types of ideas that einhorn has come through with, and maybe a personality issue? >> well, i think he seems -- it appears, unless you think einhorn's lying, which i don't think is the case, it appears that oppenheimer was resistant, or i would go so far as to say arrogant in blowing off einhorn. lots of shareholders come forward with lots of crazy ideas, but if warren buffett or einhorn gives you a call and put a thought into a particular measure, at least you have to have the courtesy of really sitting down and going through it with him. >> does that bode poorly for people who want greater capital release at the shareholders meeting? is that a poor omen for those
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people in general, in your view? >> i think it put the spotlight on oppenheimer. it's getting everybody to say, hey, what is your policy with regards to capital allocation? i think tim cook's management style, since taking over as ceo, with all his top lieutenants, has been basically give them a lot of rope, let them do their thing. oppenheimer has flexed his muscle in the last few weeks. he changed some of the metrics he's going to be reporting going to the street. hoe but i think this whole episode t would cause cook to say, you know, hey, i've got to get involved here more closely, because oppenheimer is really not addressing the shareholders. >> yeah. excellent. eric, thank you so much for that. by the way, cook two times now has referred to the einhorn proposal as a silly side show. amping up the rhetoric there. and saying they spent $10 billion in cap x last year, will
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spend a similar amount this year. although that is a small fraction of $137 billion in cash. >> yeah. pocket change. >> less than samsung spends on r & d. >> was it creative or was it creative? i'm kidding in a way. but certainly tone also matters in these things, and we're not able to pick that up. >> do you think there was a link between the two events today, that he has to present here, and a guest of the obamas tonight at the state of the union address? does he have to say something about investment in america? or returning cash to america? i just throw it out there. because he's going to -- he'll be pointed out tonight. presumably he will do something american today for the president to point to. >> he is an example of bringing jobs back to america. producing some products here in america. but when it comes to return on capital, it really plays into other people's hands. i don't want to say republican or democrat, but people who are for at least giving a holiday for repatriation taxes. a huge part of apple's cash is
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overseas. a big reason shareholders may not want to see that come back, because they're going to be taxed at a high rate. that doesn't p inthe -- >> it makes you wonder if the president's going to reference the return of mac production to the states tonight. >> yes. >> but bottom line, for now, as we continue to listen to cook, they have done their best to make a swipe at einhorn and his proposal. bringing the latest comments from tim cook live from san francisco after the break. want . want . i love making money. i try to be smart with my investments. i also try to keep my costs down. what's your plan? ishares. low cost and tax efficient. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. we create easy-to-use, powerful trading tools for all.
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welcome back to "squawk on the street." we've been listening to tim cook speak at the goldman sachs technology and internet conference. he's been on stage for about 15 minutes. mr. cook said something interesting when asked about acquisitions. he was asked by the goldman analyst leading this chat today, if theas s in the business model against big acquisitions. that factors into the conversation what apple may do with its cash. tim cook said they looked at large companies, they didn't pass our test. he went on to say, though, they have looked at more than one. found that a little bit interesting. the mere fact that he mentioned that, the fact that apple has at least times looked at acquisitions. the big company that's out there that people talked about, apple should go buy that, apple hasn't quite found that one yet. he also addressed david einhorn directly saying they will consider greenlight's proposal. but he called it a silly side
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show. we'll bring you the headlines as soon as they cross. tim cook in addressing that they have looked at more than one, a large company, in the past for an acquisition, i find that quite interesting. >> can i ask david faber a question. is it a fact of life if you're a company of that size and you have investment bankers, because that's what you have, that they continually bring ideas to the table? >> oh, sure, of course. >> i should be quite passive in looking at these options, they just land on the table -- >> the banker's job is to bring up any possibility of garnering a transaction and hence the fees associated with it. they wouldn't have financing fees, though, because apple could pay for virtually anything with cash, at least if it was overseas. but yeah, no, bankers bring all sorts of proposals. we've had jim cramer sit here last week and discuss this idea, at least, that i think may get more currency, maybe they should make a bold move to content or distribution. we'll see. >> the question is, whether it would be generic enough for
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them. >> or would they really entertain it. it was not something that steve jobs em bragsed the idea of makes a large acquisition at any price. they haven't met their test, whatever that test is. >> whatever large means also, for a company with $137 billion in cash, what would large be. big questions there. we'll check with scott later on. we'll get more reaction as to what tim cook has said for. great to have you with us. >> yeah, thank you. nice to be here. >> any surprises so far, and as a shareholder, and, you know, somebody who might be looking at apple's cash, would you like to see cash be used for an acquisition? >> certainly not. wethough, have to look back at history and realize that steve jobs himself is an acquisition by apple. apple took out the computer that brought steve jobs back, and now
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they've grown market share over the last ten years. i can't say acquisitions are bad. the ipod was also part of an acquisition. so what apple's been really good at is buying small companies, added to what they do and then they develop the products organically. we would certainly prefer to see the cash, at least the lion's share of the cash return to shareholders, while they maintain some cash both for r & d and small acquisitions where they make sense. >> that's clearly not whereim cook is heading in the comments we've had so far. are you, therefore, disappointed? >> no, i'm not disappointed. i think tim cook is much more open than steve jobs ever was. that's not difficult to be. but i don't take his comments that they're out looking at a major acquisition. some people say they might acquire a television manufacturer, we don't see that in the cards right now. >> in the narrow range today, the stock losing a little bit of ground. the analyst saying, i'm going to shift the questioning away from
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the balance sheet now. which suggests that's all we're going to get on cash management. he's now going to comments how they continue to invest in innovation, hardware, software, services. is this a disappointment today? >> it's what most people really expected. i think we're going to see any announcement about the cash probably at the shareholders meeting, which is not too in the distant future. i don't think they'll use one wire house brokerage firm to say that. we certainly have enjoyed the dividend, and the discussion that they had in the earnings report, where they said they're going to return $45 billion to shareholders over the next three years. perhaps we can see an increase of that in the shareholder meeting. >> how do you feel about apple overall in terms of the growth prospects? it seems like there has been a real change in sentiment on wall street. and i was talking to brian marshall yesterday, and he compared apple as the new microsoft. apple's more like a microsoft
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and intel or even exxon mobile at this point, than it used to be once upon a time. >> i think it's fair. i think the thing about it we didn't get the 60 times earnings out of it like a tech company during the bubble. call it ten times earnings, with $137 billion in cash on the balance sheet, add to that 18% growth instead of the 40 to 60 some people are expecting, as a value investor it's got value fundamentals and some growth. so we're very constructive on the stock. we've owned it for a long period of time and don't see a real reason on the daily vagaries of the price to make a change on that. >> in terms of shareholder, share buyback or dividend increase, which would you prefer to see? >> i would like to see them get in the camp of other, what our mature companies who have a history of increasing dividends on a pretty regular basis. i agree with the previous comments you've had on air today where there are certain mutual
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funds that value that. i would like to see a form of buyback as well. it really doesn't matter whether it's dividends or buybacks, but we would like to see a larger chunk of that $137 billion come our way. >> all right. thank you so much, tim, appreciate that very much. when we come back, a lot more reaction to tim cook's comments ahead. after the break, the ceo of one company who isn't scared by reports of an oncoming iwatch. pebble, which theoretically could be an acquisition target, depending whether they pass this test. a lot more "squawk on the street" back in a minute. [ male announcer ] you are a business pro.
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the ceo of apple, tim cook, still on the stage on the goldman conference in san francisco. scott, what's he saying? >> all right. tim cook is still making those comments on stage up there with bill, the goldman analyst. the conversation has really switched from the balance sheet and what they're going to do with all their cash on more on how the business is doing in
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gem, focusing in on the smartphone business. he's talking about a cap on market share gains for the iphone. he's still very confident they can grow market share in the iphone. he says what i see is a market that last year was around 700 million, it's projected to double in the next four years. put this into context with the downgrade by jpmorgan of qualcomm, and in that note, they cite a slowing of smartphone sales around the world. at least that growth is slowing. take that into context with the optimism of tim cook today on the stage here, and make of it what you will about what's really happening in the smartphone market, guys. >> scott, thank you for that. we'll come back to you in a few moments. few have perhaps benefited more from the latest round of rumors of an apple wristwatch than one of the smallest competitors, pebble. the ceo of pebble, eric, welcome back.
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good to see you again. >> good morning. >> you know, hearing that apple is rumored to be interested in your line of business is enough to strike fear into the heart of any ceo. what was your reaction? >> i think it's really interesting. i mean, it's rumors at this point so i can't really comment too much on the speculation. but i think what we're seeing is, a rise of interest in the idea of smart wearables, things that are worn on your body that talk to your smartphone. i'm pleased to saying we're playing a part in that ecosystem right now. >> they just got done making comments about the fact that they've averaged in acquisition every other month. have they approached you? >> i can't comment on anything like that, unfortunately. >> any idea, i mean, i know some of the reports out yesterday were very vague in terms of what the item they're testing may look like. do you have any clarity, or even guesses as to what they would have that would set their product apart? >> i think that what's going on
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in the smartphone space right now is seeing more and more devices work with the smartphone. and so with the massive market share that apple has, on the smartphone side, seeing other devices connect to the smartphone, almost like a central point of connection to the internet. i think it's a pretty big opportunity. there's also the fact that more and more people are using apps to monitor different parts of their life. sports, sickness, different activities. and i think apple and a lot of other device manufacturers -- >> but eric, wouldn't this be very different -- i mean, what you do is make devices that talk to a smartphone. if apple goes into this area, surely the device will be all the smartphone, the wristwatch. that's a different approach to the situation, isn't it? >> i think that's one way to look at it. but i think that there's a lot of technological limitations right now, on putting the
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computational power and battery life specifically in a watch form factor. and so with your smartphone being in your pocket, you can kind of leverage different battery technologies that allow for longer battery life. i think that cramming all of the components, and all of the technology of a smartphone into a wristwatch form factor hasn't really been done yet. i would be interested to see if anyone's been able to crack that code. >> eric, you couldn't comment about whether or not you've been approached by apple, but i'm wondering if you think it might be a good time to sell your business, maybe to an apple competitor? >> i think we're in it for the long haul at this point. we're just at the beginning. we've sold 85,000 devices just at the beginning of our company's life. and i think we've got a lot more opportunity to see where this plays out right now. >> it's getting exciting, eric. thanks for calling in. appreciate it a lot. >> thanks very much for having me. >> of course, tim cook is still
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speaking over in san francisco. we'll keep you plugged into that, bring you reaction as we work through exactly what the ceo of apple is saying. and the big player in the apple ecosystem will join us live, open table, one of the biggest apps available from apple's app store will join us next. a busy day on cnbc. recognize me.
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welcome back to "squawk on the street." let's get you updated to the latest tim cook. let's bring back scott. using the word crappy in the latest headlines. >> yeah. he's talking about the smartphone market in a little more detail calling it one of the best markets of all time the fact he sees incredible opportunities in emerging markets. that raises the question as to whether apple has a cheaper destlins works, iphone mini or wristwatch people have speculated the last 48 hours or so. an interesting comment from tim cook, in his words again, we're making moves to make things more affordable. that raises the question how they plan on breaking in or breaking further into emerging markets, china or india or other place, we're paying 6, $7
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$700 -- where paying 6, $700 for a high end smartphone is no choice. big comments there as we try to figure out what apple may have up its sleeve next. >> back to crappy, tim cook said we'll never make a crappy product and why we bring that up. >> what is inevitable, mobile, where apple will next take us with the hardware. let's take on matthew, the ceo of open table, very focused on mobile. good morning. you're already a pioneer. 33% of your north american seated diners already come through that channel. when you hear tim cook of apple talk about the prospect of computers people wear, maybe an i-watch, what do you have to say? how do you chase those developments? >> i think it's great. mobile for us has been a huge
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positive. whenever diners are out and about they can use our solutions. if they're wearing it on their body, so much the better. >> people talk about the innovation on your site and motivation for you to have push recommendation to people where they might be located and what might be near them rather than them simply logging onto the open table website? >> already a third of our reservations are seeing a very big shift to mobile. we have so much more to do in that area and excited about discovery options and social layer. we just acquired a company call food spotting that will now allow us to add dish images and help diners find the perfect restaurant table. >> we should mention you reported results earnings above share expectations. but jaffray was concerned the most important metric is diner
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growth is decelerating but still up 20% year on year. what is the trade off for you between innovation and expenditure to drive that volume against the margins that will suffer as you do that? >> we have an unbelievably great business model with high operating leverage. we're in a position to invest behind a massive growth opportunity ahead of us. l.a. year -- the reservations made by the
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diners or download of the open app, where are you sees the most growth at this point? is it apple the big engine of growth or android? >> across the board. we're seeing healthy growth incites and mobile applications. as well as our tabloid apps. >> would you say -- >> we don't provide a distribution but both are strong groert us. >> before i lose you, you had an acquisition and took longer to get down than many people hoped, when do you think it will turn positive on that? >> we're excited and we have taken it through the growth engine and starting to revv up. last year was great and think it will be positive in 2013. >> do you think it will be positive in 2013? >> our international guidance says in 2013, the international segment as a whole would be
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profitable. >> matthew, good to see you. matthew roberts, the ceo of opentable live from san francisco. still a lot more reaction from tim cook, share handers and the "new york times" columnist, pack in back in a couple minutes. works for thousands of home businesses. because at usps.com®, you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small. transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox
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if you're just joining this morning. been a fascinating hour as tim cook of am takes the stage in san francisco. i want to bring back scott to recap what he said and what he hasn't said, scott. >> carl, right now, he's speaking about cannibalization. he just asked the question and there will likely be a headline moving in the next couple of moments or so what tim cook has to say about the ipad mini and greater franchise. interesting. on the issue of tablet, tim cook saying the ipad is the poster child of the post pc revolution and says it will triple over the next four years. 120 million tablets were sold last year and in tim cook's words, these were simply the initial innings of this. interesting he is being asked about cannibalization of products, certainly one of the concerns you would have if they were to come out with an iphone
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mini now that they do have an ipad mini and what the ramifications would be. probably 10 or 15 minutes left in mr. cook's fire-side chat. these things usually last about an hour and over the past 45 minutes or so, he has addressed david einhorn and in some part, cash and what they may do about it, the iphone markets and emerging moments. interestingly he said a few minutes ago, speaking about the ipad, you could take this apple's gain has been hewlett-packard's gainsaying the tablet market was a huge opportunity for ap. there were more ipads sold than hp sold in the early innings of this game. that hits home. >> with that, apple is down today and google is at its highest level since its ipo in 2004. thanks. want to bring back the panel of
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tech watchers whether tim cook brought home the goods today. we welcome in these analysts. >> i couldn't imagine cook getting more specific about product road map. what i do see here inklings of c cognizance there is a market that needs to be served by a lower cost or lower perceived class of devices, part of what android had going for. i what i don't see here is recognition by cook that apple has not been a great company in services. software and hardware they do well and services where they kind of had their lunch eaten if you carve out itunes which really isn't service as a piece of software. >> a lot of vocal instruments in twitter say you say you don't have depression mentality but have $137 billion in cash and
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say you will never make a product in your words but no mention of apple maps. is cook on target or not? >> i don't know. cook is good at spinning the things that are bad and things good, a very steve jobs thing. i found it interesting they were talking about how they need to make a cheaper phone and talked about how they tried to make a cheaper ma eer mac and they cou pull that off and i question whether the company is capable of making cheaper products for people. the other thing interesting, looking at the tablet market what he said about that with cheaper devices, too. >> let me pick up that point about cheaper devices and emerging markets. is he capable releasing products that address that and persuading investors they won't lose margin and could be even more negative on the stock? co could he square that circle? >> if anybody can pull that off.
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he can say i'm the operational dude and able to ring out incredible margins from r&d and retail chain and speaks with great authority on that message. on the other hand, apple is relatively inexperienced being a value player. they've always been able to be the high margin, luxury goods player, that's where they play, not the low dollar end cap at walmart world. >> let's point out the king of that lower margin mass market emerging market was nokia. we know what has happened to noki nokia. >> the other thing is apple, when it comes to competing with smartphones and devices they're competing with googling essentially free. they're not trying to make money from android devices, the sales of the products, trying to make money from advertising, a completely different model than apple goes through. >> that's a very good point that
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nick makes there. apple still has to make it on hardware. google doesn't have that. they have minimal to zero cost of additional units apple will always be fighting with on their end. >> to your point of apple playing in the luxury goods space, being used to being the luxury goods player maker and not value maker, value play. the problem here really is apple doesn't have that next wow product to compete. wouldn't it be going into the value category an admission it can't innovate enough to develop that next great product for the luxury consumer? >> that's where they have to keep now in vating towards the premium. we all talked about the television repeatedly and to me, plays well on their model and will turn into a new covenant on hollywood rather than technology. the new rumors on the wristwatch would be mostly a pifr reripher
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the iphone that could be really great and keep you tied to the iphone as an cliff pifr reriphe. >> they atalked about acquisitions internally, if it's not the watch, do we leave today with television as the next thing? >> i think television will be the next thing and believe they will have to get over the wearables market. computing is going to become a wearable experience where you have glasses and wristwatches and they have no choice but to enter that market. as far as televisions, they could be making 20 billion as a quarter if they pull it off right but the problem is not the device but the partnerships, and i don't know how they do that. >> starting this conversation returning cash to shareholders, if they have to enter that market, how much of that cash
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pile do they need? >> that's why they need the cash, not to make better hardware and cheaper devices. they need it with partnerships, netflix doing it with house of cards. and content trying to usurp the actual television experience and they have to do that and where they will need that money. >> appreciate it. i want to bring back scott in from san francisco. >> a few minutes ago, tim cook mention i mentioning china and brazil for the first time he calls explosive growth markets for the company and really gets you to understand how important he sees emerging markets in apple's future. people buying ipads there don't have other apple products. the implication when they draw their first, they'll be drawn into the apple ecosystem and tim cook has spent this morning talking about the importance of emergie ining markets as apple
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continues its growth going forward. that raises the question how you penetrate those markets more substantially than they have already, through lower priced products cook addressed also. i thought pretty interesting a few seconds ago, cook saying we're not a hardware company making a big deal about the fact they get a lot of revenue from their software and their services. the mac, ipad and all the other product they brought to market. >> absolutely. one of the few takeaways we are getting today, the ipad is their favorite son. talking about sales of trablts tripling in the next few years refuting they're cannibalized from other products. saying they were essentially the other products the mac once was.
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>> and in china, keep in mind there are four domestic suppliers of smartphones in china that out-sell apple currently. and a cool pad for 1 wh00 u.s. dollars and how they compete when apple has the lead in china is interesting. >> when he says the smartphone market will double in size, there's a lot of question within that how much goes back to apple. >> opposed to other players and some of the domestics there. >> more analysis on tim cook at the san francisco conference coming up. and talking to johnny isakson about the state of the union coming up. >> senator isaacson was rated as the sixth most conservative senator in the senate. we'll talk in about 10 minutes about all the pertinent issues
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margins are slowing or compressing. we know that. it's been one of the central reasons why investors have sold this stock over the last several months as they have. concerns mount as to where margins will go in the future. cook goes on to say because we're not a hardware company we have other ways to make money and reward shareholders. certainly, there's some spin in there to get everybody to see the margin compression the way they have in the last several months. he's addressing the fact wha when all know and what they're concerned about. mar grirns compressing at apple
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and he has a strategy that will please shareholders and investors an get this stock going high sneer they're an ecosystem and stores are not designed for selling, zpirnd services customers. whether ron johnson of jcpenney is the architect of that, i'm not quite sure. >> one of the architects. there were a lot of people involved in the apple store buildout. look, tim cook's job is to get everybody here to believe they're on the right path regardless what the stock has done, going from a high of so much $5 to compressing down to where it is now, a belief they have the products to take it to the next level, a belief they are innovating in a way that can take the company and thus the stock to the next level. what they may do with their cash over the short term and announcement in the next several
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weeks. mr. cook should be finishing up in the next several minutes. >> what would you say is the take away on "fast" melissa? >> the fact they have looked at large acquisitions and haven't passed the test for options of lea using that cash as buyback or dividend. that will be an important take away and maybe this will attract a base of investors for value that will give the stock a firm floor. it seems like the stock has found that floor since its bottom. up to to 480 at this point. >> talking to investor, saying the type of things they have to get into, for example glasses that connect by blue tooth or buying contents for the future of the general apple environment might prevent them from returning that cash pile or majority of it. >> it has so much cash and how much it generates, it can do both. >> we don't know how big the
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ambitions are. you don't know what they are on television for example. >> it has to return to being a growth company at the trajectory it had been and investors will wait and wait with it. that's a big gamble at this point on a stock fallen so far. >> we'll see whether the stock is more referred to balance sheet issues we garreding a dividend or@@ innovation issues regarding a big acquisition. cook said, in closing, so looks like that conference, his part is coming to an end. our thanks to scott wopner out west. >> and cool pad technology, one of those domestic suppliers in china out selling apple in china. we will have the device available in the u.s. on set. >> and we'll finally get about talking about g-7 and currency
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wars. >> as apple sucked a lot of the oxygen out of the room. coming up, spending cuts and what republicans want to hear from the president tonight in the state of the union. don't forget to tune into our special coverage at 9:00 p.m. eastern time. and cnbc's twicker will be live after the speech. use the #sotu for a chance to see your tweet in the twicker. later -- chinese visitors will be spending big on luxury this week. look at expensive gifts they'll be buying and giving to celebrate the year of the snake. it's on to germany. tdd#: 1-800-345-2550 then tonight, i'm trading 9500 miles away in japan. tdd#: 1-800-345-2550 with the new global account from schwab, tdd#: 1-800-345-2550 i hunt down opportunities around the world tdd#: 1-800-345-2550 as if i'm right there. tdd#: 1-800-345-2550 and i'm in total control because i can trade tdd#: 1-800-345-2550 directly online in 12 markets in their local currencies.
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welcome back to "squawk box" on the street on a tuesday morning. tim cook of apple is just wrapping it up for the investment conference at san francisco. let's wrap it up and tie up the loose ends. >> about 10 minutes ago, tim cook wrapped up the fire-side
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chat at the technology and internet conference spending about an hour, almost a full hour exactly, talking about everything at least in part from apple's cash on the balance sheet, what they may do with it from the tablets and smart market. the highlights addressing david einhorn directly saying they do not have a depression era mentality. it was green horn's david einhorn last week that filed suit and called on am to pay out preferred stock and do something with the 1$130 plus billion the have sitting there. mr. cook saying, in his words, we will thoroughly consider greenlight's proposal but rather dismissive of it at the same time calling it a silly sideshow finding it bizarre we would find ourselves sued for something good for shareholders and asked about the acquisition as well, they have done a lot of smaller acquisitions but no large scale
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acquisitions over the last several years and asked whether there was something in the business model against big acquisitions. saying no, they have looked at large companies but they didn't pass the test saying we've looked at more than one. they don't feel pressure to do an acquisition and grow revenues and one way they may try to spend the cash they have sitting on the balance sheet. i'm looking at the stock on the lows. perhaps the market was looking for a little bit more from tim cook today on what they mig with some cash. he wasn't going to sit here and announce a dividend hike and announce a new product in the pipeline. if you read between the lines where they see outlook going and emerging products and margins on
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certain products, you can read between the lines and see theying my be looking at some product that might be at a lower price point than the full-blown ipad or ipad mini. >> even the way he used the word "sideshow" with einhorn and how their term might be different than ours, much more short term focused than they are. bringing in columnist and writer of the bits blog, gracious enough to stick around. thanks for that. >> thanks for having me. >> i'm curious as someone who covers tech so well, where do you view apple in your universe? do you see them the way you saw them three or four years ago? has nianything changed? are we waiting for them to demonstrate the now innovation with iphone and ipad?
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>> they're still the sexiest company out there, best hardware company and still make beautiful software. one thing happened they put a lot of energy so consumers couldn't hadon't have to think about megahertz and gigahertz with computing and done this with the iphone and now shot themselves in the foot and have to convince customers how to upgrade these devices but not thinking about these upgrades. you look at the tablet market, this is one of the big concerns they're up against. i just purchased an ipad menny will i buy one next year even though i don't think i need more memory? those are what they will tackle. >> well said, working in incremental steps is a lot more challenging. don't go too far, nick. i want to bring in jon fortt in cnbc in san francisco, who was in the room with tim cook.
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your reflections? >> i think the stock might have tanked when tim cook said they will spend a similar $10 billion on capital equipment they did before. a couple things were interesting to me. one, he talked about the way they attacked lower price points in the past saying people pressuring them to get a cheaper mac, netbook and they disrupted that market and the ipad's margins are a lot better than they would be on a really cheap pc. he said again and again pretty much we've seen this play out before and stressing things haven't fundamentally changed from his perspective and economics of the smartphone market, how apple attacks things, retailer thes doing well. talked about the halo effect of the ipad and a lot of people are buying it as their first device and then go and buy other
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devices. he said they expect margins to improve even though people are buying a cheaper thinner margin ipad mini over time and though they expect this to be a high margin product, the supply chain can bring costs down and improve over time. his message seemed to be stop worrying, go to an apple store and it will make you happy. yes, he did actually say that. >> when he called this a sideshow and said that proposal was creative, it got right out here as some what of a smackdown, i wonder if that's how it read in the room. >> that's how it read to me. first, he said we'll consider anything our shareholders bring to us. to me, he seems to be talking about the idea of returning more cash to shareholders. then, he said our true north on the investor side this is
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shareholder, being good to the shareholder, even if we could issue preferred stock without a vote from the larger shareholders, we wouldn't do that so it's a sideshow in essence. >> thank you for that busy couple of hours and from ""the times"." weighing in on that camp cruise ship stranded in the gulf of mexico, still trying get to alabama. back in a minute. man these guys are slow.
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president obama set to deliver the state of the union tonight at anybo9:00 eastern ti. for that, we go to rick santelli. >> welcome. welcome senator isaacson, senator from georgia. two things. i would like you to weigh in on two ideas. first, one put forth in the "washington post" yesterday. obama, job of debt reduction nearly done, the first one. 80% of the commentators i listen to on television and the media at large, hey, maybe the president will be less partisan and reach across the aisle. weigh in on those two notions. >> first of all, we're not 80% done on the debt and have a long way to go. this president needs to engage on our debt deficit. that's critical. second, i hope it won't be that partisan. hope it will be bipartisan. realizing america has a budget
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problem and americans have tightened their belts and it's time we did in washington. >> i'm not as optimistic as you are. after four years, i can pretty much tell you all the issues out there and a lot of good ideas. you brought up jobs. really, isn't there a philosophical difference here. that the spending money government orchestrated version of trying to create jobs versus the type of job creation you as an acknowledged conservative believe in. thoughts? ran a business for 33 years. job creation needs to be done in private sector, not in government. we heard rumors the president will talk about more government stimulus and more government jobs. that's not the solution. that perpetuates the problem. we need to get center rtainty i regulation and move this country forward. >> when it comes to regulation, you were one of several authors who wrote the original no child left behind. i personally don't think the
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program was that successful, and looking at california taking algebra out of the krucurriculu have an education problem not spending problem. >> you're right. but california is a whole different ballgame. >> no, i know. but it's tied in together. if we're serious about jobs, they can't be subsidized by the government, they have to be subsidized by the intellect we enhance for young people. >> we need to empower the american work to do the jobs for the 21st century. public has not done that but no child left behind was a success and we need to reauthorize the secondary education and re-energize science and math subjects. >> you voted for the bill that ultimately settled the fiscal
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cliff issues the end of 2012. you said on one of our shows you weren't happy about it and wished it would have been in more of a public venue so people could see what's going on. do you think it's possible to do entitlement reform and tax reform in a way people can some what understand the process or is president obama never going to deliver on the original promise in '07 to be a more transparent president. >> if the president doesn't deliver on medicare a reform of our entitlement, we'll never have the country we've all known and all love. we're at a breaking point in this country and our entitlements are two-thirds of spending, on cruise control, need to be reformed. we need to not just save them for the current generation but future generations. >> only a half a minute left, senator, the sequester. good idea, bad idea? how do you think it will turn out? in the end, is it the best of a series of unpleasant options? >> it's bad idea whose time has
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come. it will happen on the first of march and last a few weeks until the pressure of the public, the military, education, health, science research all comes together and says, congress, do your job, instead of cutting a the board, make the cuts you need to make them but empower the programs that help america move forward. >> senator, you've been a great guest. see if you can do me a personal favor, see if you can get that group you belong to, to pass a budget? >> harry reid won't get a paycheck if he doesn't pass a budget. we finally got his attention. >> i don't think there's any tag days for him getting a paycheck but thank you. >> about the g-7 -- >> my word, absolutely. currency wars front and center, particularly london, the world's major foreign exchange center.
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notice the stock markets are higher almost across the board. one of the major reasons the banks are rallying today, at the helm, barclays. unveiled a structureture to cut costs and rebalance the bank away from investment banking and the way consumer units grow organically much faster and return to internal equity of about 15%. the stock is up 18%. it continues to gain and dragging other banks in the uk and elsewhere and spain with it, and what the ceo had to say. >> we have to manage our capital very effectively and reduce our cost space and reduce the ratio of compensation to our net income. that's what we're talking about today. >> for the record, the average bonus investment banking at barclays is down 17% at $84,000. the big debate in europe remains
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on currencies, brussels, day two of the finance meeting and trying to put forward the idea somebody will doing something about the strength of the euro and the establishment saying it's about its long term average, no traction with the germ germans. importantly today, the uk chairing the g-20 in moscow later in the weak issued a statement they effectively said provided you are massively monetary easing printing money for your domestic economy, that's fine. so the japanese will not be under pressure in moscow and a green light for people to send the yen lower. check out this graph for moves, look where we are on the strength of the euro against the yen. astounding move, up 24%. the move on dollar yen is 27%. yes, it's an issue but euro yen for europeans is even greater.
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>> there's been some discussion if japan signed off on the g-7 statement, does that mean they're done doing what they're doing, at least for now? >> no. the g-20 is saying to people provided you are not intentionally weakening your currency, you are massively print i printing domestic money, that is fine. the reason they're saying that because the undersecretary of th t said it here. and indeed the bank of england. who is going to stand in the way of the japanese? >> stones and glass houses, thanks. on a different note, the can shall cruise ship, triumph, has been stranded the last couple of d days. and greg magee, the captain of vigorous has been on scene. 1 it is a while before you can get it to mobile.
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can you give me a status report, how the ship looks and what is involved getting this into mobile? >> caller: absolutely. right now, the ship is seaworthy, no apparent damage throughout the ship, appears to be undamaged and seaworthy and we have no reports of damage at this time. yesterday, three ships unloaded three tons of supplies to the triumph. 8:30 last night, two tubs arrived onscene and started the process of towing them north. we're currently 230 miles south of mobile, alabama, moving north at 5 and 8 miles an hour. >> i just wonder as the duties of coast guard cutters go is this unusual to tug a boat of this size that distance? >> caller: generally it is
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unusual but it's certainly not impossible. we have the tug pioneer on scene and they tow some of the largest structures as far as the gulf platforms and other ships so they're well within their capability of towing this vessel. >> we've been told about some conditions on board, toilets operational once again. they do have some access to hot food and able to dine by the pool-side restaurant and wondered if you had a chance to get on board and see those conditions? >> we have not boarded the ship yet and would do so if requested by carnival and the master of the vessel. at this time, there's no request for assistance so we've not gone on board. >> appreciate your update on that. we have a lot of people batching t -- watching the triumph coming into mobile. in the meantime, let's bring
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on kevin sheehan. seems barely a month ago you were ipo'ing. thank you for being here. >> thank you. >> sunday night, you find out carnival has dropped the ball again, this time a fire and disabled ship off the gulf of mexico. what went through our mind? >> this is an industry that will periodically have different incidents whether related to the ship and macroeconomic environment. from our perspective we're focused on this great industry and prospects we have to grow our business over the coming years. that's as much as we focused on it, to be honest. >> you don't pick up the phone and say, come on, get the business together? >> of course not. mickey is a great lead er and a super ceo who has been with that
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business at family since the beginning so they certainly know a lot better than i do how to deal with these situations. >> kevin, there's been a very good reaction to results you brought to the table, chiefly because your guidance for the year is probably stronger than most investors thought you would bring to the table. 5 1/2 in growth and i think the stock is up 6% in response to that. >> these incidents happen from time-to-time. thankfully everyone is safe and sound on the ship, so they've done what they can do under the circumstanc circumstances. we're focused on our business and very confident we have the new ship, the norweigian break way launching in a couple months and putting the finishing touches. i'm heading to germany this
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afternoon to make sure things are on target, as i can expect having the ship built in germany. >> the premiums you're getting for people to book onto the break away in new york are 30% higher, helping that projection. one last question about the stunning share price performance you had over the last month since you priced at $19. i got a note saying they thought the 41% rise in the stock was enough all factored in. they're now raising their target and think your stock can reach $38, $50 over the next 12 months, a 38% premium to where we are now over this ability to price over the rest of the mark. what is your response to that call from the mirror? >> you look at our business model and the fact we have a 10 plus percent growth rate of new
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build we happen to be in a different position than the other two public comparisons. for . >> you mentioned earlier, it's a nice on board experience and in turn garners a nice premium on the on board experience, i think as we go through this and people understand better where our company has gone and where we're going, they're starting to buy into the story. >> certainly some are. the higher multiple. kevin, it's good to see you again. thank you very much. ceo of norweigian cruise lines. coming up, economic boost for cruise lines around the world. and apple ceo and stock at session lows. how do traders using technical analysis streamline their process?
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there. i said it. they don't have pictures of my kids. they don't have my yoga mat. and still, i feel at home. could it be the flat screen tv? the not so mini fridge? ♪ the different free dinner almost every weeknight? or maybe, it's all of the above. and all the rest. am i home? nope. but it almost feels that way. homewood suites by hilton. be at home. special edition of halftime live. ceo apple tim cook just talked. and bill gurley will reveal the next big thing as well. big hour ahead noon eastern from
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san francisco. >> you already had a heck of a couple of hours, scott. thanks for that. the chinese new year's holiday in high swing, a huge holiday and more and more retailers are catering to them. why? because chinese tourists are big spenders. >> michelle is here already having lit up the airways with steny hoyer is here now. >> chinese tourists in their state spend more per person than any other overseas visitor. $179 per day and as much as $1900 per trip, way over the average of visitors who spend in california, $117 per day and $1300 per trip. the british are the largest air travelers to boston, 280,000 in 2011 spend an average of five
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nights and spend only $230 million. i say only because chinese visitors numbered less than half the brit, spent less than three nights, spent $300 collectively. they are big spenders. joining us on set to talk about high end retailers are trying to grab a piece of that revenue. >> it is. retailers hoping chinese new year's tourists can be their christmas. on their trip they'll be keeping up billions of dollars worth of handbags and watches. they spent $7.2 billion on luxury overseas. up 29%. and cartier is religion out the red carpet to lure chinese shoppers. the king of snake fling has to be buthis one.
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its store put out a very large snake. >> it's huge and very high and chinese consumers walk in and buy beautiful snake pieces. >> they're rolling out new items, these two bracelets go for more than $200,000 and emeralds and 18-karats of pave diamonds for $9.5 million. a very nice way to say happy new year or as they say in china. >> some say given the experience of a nike in china and kfc, some say they're not brand loyal and others say they love their brands. >> when it comes to luxury it's all about brand and status. they account for over a third of the luxury market.
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the price is better here and the status having bought something in the united states. >> just the opposite here. >> the snake thing, would you wear that? >> anything worth $9 million, i would wear. >> good ha have you. >> more on power lunch. crazy stuff. >> won't want to miss that. coming up, everything from apple's cash hoords ards, and possible new products and what it means for the stock that is down today. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data.
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apple ceo took the stage. gene munston is an analyst at piper jaffray. gene, i don't know how you do it. good to have you back. >> good to be back. >> you say there'll be two key takeaways. a, greater confidence of a slight dividend hike and continue to expect a cheaper iphone product probably the end of the september quarter. what did you think of today's comments? >> the comment about serious about cash distribution amps up that they will raise the distributions after the march quarter. not that they didn't have a dividend but a positive in a store that hasn't had a lot of positives, around the corner. we continue to believe they're
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coming out with a cheaper phone and think that cooks' comments support that and the reason that is so important we expect accelerated revenue growth 14% this year to 24% next year and you need a big product to do that. reading the tea leaves today i know the stock isn't reacting on this but ultimately think this is positive for the stock. >> that cheaper phone, if it is to come is in tend to what audience? emerging market play or meant to go with the china mobile deal? >> exactly. we heard evidence in the supply chain something like this is being built. probably a different form factor. tim cook made comments that you have to think of the ipod and ipod shuffle both in the ipad family but different form factors and fit the hurd
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hypotheticale. >> 60% of products will be sold below $400. for apple to be relevant in phones, for apple to be relevant, they have to go after that market. >> you even referenced this smart watch rumor in your note, could be addressing emerging markets as ipad was low cost alternative to the mcintosh. people think it's about price points but in some cases you make a lateral move to a different kind of product in the meantime? >> exactly right. it could be act form factor. they are two levers they can use an the watch is one opportunity. clearly, there's more evidence that's coming and could be an opportunity in emerging markets. we can't get stuck in this mentality it's the iphone for che cheaper. if you take cook's comments to heart, you have to think outside
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the box and he was very clear about innovation is alive and all these things point to this cheaper product in the phone market. >> finally, gene, your target is still 767 and i imagine you will take some grief for that but you are stubborn at that target? >> we are. if we're sitting six months from now and wrong about that cheaper phone, that starting is in jeopardy but if we're right, they can hit it. >> facebook getting slapped with another downgrade and say mog bill is not enough. a sell. (announcer) scottrade knows our clients trade
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